President Donald Trump is set to appoint a new chair of the Federal Reserve this month, marking a pivotal moment for his administration’s economic stewardship. With Jerome Powell’s term expiring, Trump’s forthcoming selection will symbolize a complete transfer of economic accountability to his leadership, ending any remaining justifications that economic hardships are due to predecessors or independent authorities.
Throughout the initial year of his presidency, Trump has frequently attributed America's economic difficulties chiefly to two figures: former President Joe Biden and Federal Reserve Chair Jerome Powell. He has criticized both for their roles in inflation and housing unaffordability. However, these attributions are increasingly being challenged by public opinion and economic realities.
Declining Effectiveness of Blame on Biden
The President continuously points to Biden as responsible for ongoing inflation. Yet, Biden has not held office for a full year during this period, undermining the credibility of this claim in public perception. Polling data reflect a skeptical electorate; a recent CNN poll found that 61% of Americans believe Trump’s policies have worsened economic conditions, a figure surpassing those who blame Biden for economic declines. This trend suggests that Americans are holding Trump personally accountable for economic challenges despite his attempts to deflect responsibility.
Critique of Powell and Fed Policies
Similarly, Trump has been openly critical of Jerome Powell, whom he appointed as Fed chair in 2017. From early in his term, Trump expressed dissatisfaction with Powell's reluctance to lower interest rates, which Trump perceives as detrimental to the economy and housing affordability. Powell has acknowledged delays in the Federal Reserve's inflation response during 2021 and 2022, leading Trump to publicly deride him as "too late." Trump insists a new Fed chair would act more swiftly to reduce rates, which he argues would lower mortgage costs and stimulate the housing market.
Despite Powell being Trump’s own choice, the President has labeled his appointment a mistake. The next Fed chair, expected in May when Powell’s chairmanship concludes, will become the president’s direct economic representative, bearing both the praise and the burden of future economic developments.
Potential Impact of Lower Interest Rates
One of President Trump’s key promises is that the new Fed chair will trigger rapid reductions in interest rates. However, the Federal Reserve’s rate decisions are governed by a committee rather than a single individual. The chair holds significant influence but cannot unilaterally dictate monetary policy. While Trump has the opportunity to appoint several Fed members aligned with his approach within the year, a sustained shift toward lower rates is not assured.
Even if the Fed chair and committee successfully reduce rates in 2026, the consequences for the economy are not straightforward. Lower interest rates can decrease borrowing costs for businesses, potentially boosting investment and employment. Over time, this could improve job market conditions. However, increased employment and higher wages often lead to elevated consumer demand, which could, in turn, heighten overall prices, counteracting inflation control efforts.
Furthermore, the Federal Reserve had already cut rates in three consecutive meetings to close out 2025. Pushing rates lower still risks rekindling inflation over the longer term. Lower interest rates can influence mortgage rates, which generally track longer-term Treasury yields moving somewhat alongside the Fed’s short-term rates. Reduced mortgage costs could aid affordability for some buyers by lowering monthly payments and total interest over time.
Yet, the fundamental problem afflicting the housing market remains the critical shortage of supply. According to Goldman Sachs, approximately four million additional homes are needed to keep pace with population growth. This structural limitation has entrenched affordability problems in high-demand urban markets like New York and San Francisco. Lower mortgage rates may not significantly alleviate these issues and could exacerbate disparities if current homeowners use refinancing to access equity rather than enabling new buyers to enter the market.
Limits of Presidential Influence on the Economy
In reality, the President's ability to control the trajectory of the $30 trillion US economy is limited. While federal policies and executive actions can affect economic conditions, they do not directly command market dynamics. President Trump’s administration has implemented certain measures with direct economic impacts, such as tariffs, which according to the conservative Tax Foundation increased household expenses by roughly $1,100 in 2025.
The administration's recent spending and tax legislation offers tax returns to millions of Americans but is simultaneously expected to remove Medicaid coverage from millions. The President has negotiated lower drug prices for Medicare recipients and proposed $2,000 tariff rebate checks designed to stimulate the economy ahead of midterm elections.
Despite the significance of these measures for many families, they have not resolved systemic economic challenges. Employment growth has stalled, unemployment rates are rising, wage gains are diminishing, inflation remains persistently elevated, and many lower-income Americans continue facing financial precarity.
This combination of stagnation and rising costs undermines President Trump’s assertion that the economy is thriving and deserving of an “A+++++” rating. For many Americans grappling with affordability, the notion of prosperity feels distant, fueling dissatisfaction with economic leadership.
Political Implications Ahead
As the President's opportunity to nominate a new Fed chair approaches, his capacity to attribute economic difficulties to others diminishes. Taking ownership of the economy during a period marked by faltering labor markets and persistent affordability hurdles could prove politically challenging. The forthcoming midterm elections will offer voters another chance to express their views through the lens of economic conditions and personal financial well-being.